Why Altria Stock Dropped Today

Shares of Altria Group (NYSE: MO) fell on Thursday after the cigarette giant reported alarming market share losses.

By the close of trading, Altria's stock price was down more than 5%.

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Losing share

Altria's domestic cigarette shipment volumes declined by 7.9% in the fourth quarter, as smoking rates continued to fall in the U.S.

More worrisome is that Altria's lucrative Marlboro brand saw its retail market share of the total cigarette category fall to 39.8% -- a year-over-year drop of 1.5 percentage points.

More people are turning to oral tobacco products for their nicotine needs. Yet here, too, Altria is failing to keep pace with its rivals. Shipment volumes for Altria's oral products fell 6.3%, driven by retail market share losses.

Concerningly, the company's on! brand saw its share of the fast-growing nicotine pouch category fall 5.3 percentage points to 13.4%.

Profits are holding steady

Still, Altria's revenues net of excise taxes declined by less than 1% to $5.1 billion, as price hikes largely offset lower shipment volumes.

Altria's adjusted earnings per share, aided by stock buybacks, were flat at $1.30.

Looking ahead, management expects Altria's full-year adjusted earnings to grow by 2.5% to 5.5% in 2026, to a range of $5.56 to $5.72 per share, driven in part by the company's cost-cutting initiatives.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.